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Bank of Baroda’s net loss narrowed to ₹991 crore in the fourth quarter, against ₹3,102 crore in the year-ago period, on the back of healthy growth in net interest income, lower loan-loss provisioning burden, and write-back of provision for investment depreciation.
Net interest income (NII) increased by 26 per cent year-on-year (y-o-y) to ₹4,863 crore in Q4 FY19. Total non-interest income was up 19 per cent y-o-y to ₹2,174 crore.
Loan-loss provisions declined 21 per cent y-o-y to ₹5,550 crore. The public sector bank received a write-back of ₹344 crore provision for investment depreciation, against ₹332 crore it had to make under this head in the year-ago period.
PS Jayakumar, MD and CEO, said: “The revenue-side of our story is coming out quite strongly. We have been able to consistently grow our balance sheet quarter after quarter.....we have the ability to sustain the growth, going forward.
“There could be a little bit of deceleration in Q1 FY20 as you start comparing the growth with the combined growth of all the three banks....In general, I would say that we are beginning to see fairly robust momentum as far as our balance sheet growth is concerned.”
Dena Bank and Vijaya Bank were merged with BoB with effect from April 1, 2019.
Total deposits
BoB’s total deposits were up 8 per cent y-o-y to ₹638,690 crore, and net advances increased about 10 per cent to ₹468,819 crore.
Jayakumar expressed confidence that recoveries will exceed slippages. In the reporting quarter, slippages were lower at ₹3,192 crore (₹11,765 crore in the year-ago quarter), while reduction in bad loans was higher at ₹8,696 crore (₹4,569 crore).
The slippage during the quarter includes an exposure of ₹530 crore towards IL&FS.
Gross non-performing assets (NPAs) reduced to 9.61 per cent as on March 31, 2019, against 11.01 per cent on a quarter-on-quarter basis. Net NPA ratio declined to 3.33 per cent as on March 31, 2019, versus 4.26 per cent as on December 31, 2018.
In absolute terms, GNPAs declined 15 per cent y-o-y to ₹48,233 crore, and net NPAs fell 34 per cent to ₹15,609 crore.
The BoB chief said his bank would raise capital in FY20 by issuing additional Tier-I bonds and via employee stock option scheme. With the bank going in for rationalisation of overseas operations, including closing down operations in a few countries and reducing the scale of operations in others, the contribution from this segment to the bank’s overall business came down to 19.81 per cent as of March-end 2019, against 19.87 per cent as of December-end 2018.
To downsize overseas operations
Bank of Baroda is downsizing its overseas operations in a big way. The PSB has already exited from Bahamas and Bahrain, a top official said. Papia Sengupta, Executive Director, said: “We have surrendered our licence in Ghana. In Hong Kong, we are running down our book. But the regulator there wants us to go slow. So, we are going slow. By the end of this year, we should be able to wind up business.” The bank has run down its business in South Africa and has closed down the Durban branch.
The lender will wind up its operations in China by September.
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